Sapphire Energy and Phillips 66 say they will work together to collect and analyze data from co-processing of algae and conventional crude oil into fuels. The goal is to complete fuel certifications to ready Sapphire's renewable crude oil, called Green Crude, for wide-scale oil refining.

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Sapphire Energy and Phillips 66 announced a strategic joint
development agreement aimed at taking production of algae
crude oil to a significant step toward commercialization, the
companies said on Wednesday.

The companies will work together to collect and analyze data
from co-processing of algae and conventional crude oil into
fuels. The goal is to complete fuel certifications to ready
Sapphire Energys renewable crude oil, called Green
Crude, for wide-scale oil refining.

Under the agreement, the companies will expand Sapphire
Energys current testing programs to further validate
that Green Crude can be refined in traditional
refineries and meet all of the Environmental Protection
Agencys (EPA) certification requirements under the
Clean Air Act.

This includes determining the optimal operating conditions
for processing algae crude oil into American Society for
Testing and Materials (ASTM)-certified diesel, gasoline and
jet fuel. Once the study is finished, the companies will work
together to complete the EPA certification process to
register a new fuel product entering the market.

"In under a year, Sapphire Energy has entered into contracts
with two major companies in the oil and gas industry, showing
that there is increasing momentum for algae fuel as a viable
crude oil alternative, and significant interest by refiners
to have new and better options to meet the California Low Carbon Fuel Standard (LCFS) and
the federal Renewable Fuel Standard (RFS)," said Cynthia 'CJ'
Warner, CEO and chairman of Sapphire Energy.

"Were looking forward to building a strong relationship
with Phillips 66, an established leader in research and
development for next generation fuels, who understands the
opportunity our Green Crude oil holds as a feasible
and sustainable crude oil choice for refiners," she added.

Combining Phillips 66s experience in algae research and
technical expertise in hydroprocessing and fuels upgrading
with Sapphire Energys algae cultivation knowledge could
yield promising results, according to the companies.

Phillips 66 adds that its new relationship with Sapphire
Energy complements other renewable fuels collaborations in
academia and other sectors to convert a wide array of
sustainable feedstocks to transportation
fuels. The companys biofuels platform is one piece of
a technology strategy that also
includes research and development of fuel cells and solar
cells.

"Phillips 66 is committed to providing energy and improving
lives. We are continually on the lookout for promising technology advances in energy
manufacturing and logistics," said Merl Lindstrom, vice
president of technology for Phillips 66. "We
believe this joint development project with Sapphire Energy could
produce a refinery-ready, sustainable
product for Phillips 66, creating yet another exciting
opportunity in this rapidly changing energy landscape."

Sapphire Energy is now producing crude oil daily from algae
biomass cultivated and harvested at the companys Green
Crude Farm, located in Columbus, New Mexico. The farm is the
worlds first algae-to-energy facility that demonstrates
the entire value chain of algae-based crude oil production,
from cultivation, to harvest, to the conversion of biomass
into ready-to-refine crude oil.

In initial testing by Sapphire Energy, Green Crude
oil was upgraded into on-spec ASTM 975 diesel fuel, proving
its compatibility with the existing network of pipelines,
refineries and transport systems. The company expects to be
at commercial demonstration scale in 2015, commercial scale
in 2018, and is eventually projected to produce 1 billion
gal/year by 2025.

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